Cannabis Federal Legalization is moving forward in 2022 and I wanted to lay out what to expect for cannabis federal legalization and what that means for cannabis investments and cannabis stocks. The House of Representatives is in the process of passing the MORE Act and has already pushed through The SAFE Banking Act some six times. Now, it is a matter of Senator Chuck Schumer to make good on his statement from January whereupon he stated: “In the coming weeks, we’re ramping up our outreach—and we expect to introduce final legislation. Our goal is to do it in April,” Schumer said at the New York event.
On Friday, March 25th, the House of Representatives stated they were going to vote on the MORE Act one more time. The MORE Act is set to go to the full floor of the House of Representatives on the week of March 28th. Cannabis stocks moved significantly higher on the news.
I wanted to outline my thoughts of what happens next with cannabis federal legalization, and of course cannabis stocks and cannabis investments.
Bi-Partisan Support for Cannabis Federal Legalization
There is plenty of support for cannabis federal legalization in both chambers of Congress and both parties. This is something that I have been following very closely over the past several months. I had never expected Congress to enter into session in January 2021 and immediately pass legislation. Instead, my expectations were that cannabis federal legalization would occur closer to the mid-term elections in 2022. This is looking to be the correct plan that Congress is playing.
“The only place cannabis is controversial is in Washington D.C.”, so says Representative Mace (Republican, South Carolina) who introduced a bill on November 14th entitled “The States Reform Act” to federal legalization of cannabis on the Federal level. That bill has not gained much traction since its introduction, least of with in the financial markets. Also, there was the SAFE Banking Act that was tagged onto the NDAA (National Defense Authorization Act) in the House of Representatives, passed there, but was stripped out of the Senate version. There were other attempts to decriminalize marijuana on the Federal level throughout 2021.
Over the weekend of December 18th, the Bi-Partisan Cannabis Caucus to Congress (Yes, there is one) put together a memo outlining their goals for 2022. In this, they stated their goals and objectives for legalization of marijuana in the coming year. 70% of Americans want legalization of marijuana. This is from Gallup Polls. And as Representative Mace points out, the disparity of the several states having so many different laws should push the Federal government to updating its own laws that allow for this.
The Blue Wave & Cannabis Federal Legalization
There was a big move in cannabis stocks in November 2020 and then again in January 2021. This was because of the so-called Blue Wave that would usher in federal legalization of marijuana. But, since then cannabis stocks have largely been sliding lower and lower. This is because for one reason, cannabis legalization has not occurred.
My thinking on this is that Federal legalization of cannabis is going to happen, not if. And, with the momentum, this memo could be the outline of what is likely to happen. The memo states they are going to introduce something into almost every single committee in Congress and put together a broad, and comprehensive bill for legalization of cannabis.
$18B All-Cash Business & The Feds
If there is one thing I know about the Feds, they hate cash. They cannot follow it. So, one important thing to keep in mind is that passing this Federal legalization of weed legislation would allow for having all of these businesses throughout the United States to utilize banking. Feds will get what they really care about: Taxation and the ability to see where all of that money is. After all, wasn’t the war on drugs really about things like this? The Feds hate cash simply because they cannot watch it. Don’t believe me? Go to your bank and try and withdraw or deposit $10K. hahahahaha… good luck.
Timing Cannabis Federal Legalization
The timing on this would be optimal for federal legalization of cannabis. 2022 is an election year. The Blues will want to show voters they accomplished something comprehensive. I wonder is it possible and more likely that the Reds will trump the blues at this point?
Truth is, federal legalization of cannabis is mostly a certainty, not a possibility. Putting together comprehensive legislation will allow for the United States to remain competitive in research & development of pharmaceutical technology derived by cannabis, help with resolution of PTSD issues with military members, as well as generally bring laws in line with the general trend of the people of the United States.
I am looking for this outlay of events: introduction of bills to the committees throughout the beginning of the year. Then a vote on the matter in late spring, reconciliation and then passage in early summer.
The stock market and cannabis stocks will very likely move in accordance with this momentum.
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How to play Cannabis Stocks & Cannabis Federal Legalization
From my perspective, there are many who are disgruntled with the speed at which cannabis Federal Legalization is taking place. In fact, it may be that so many are sitting on their hands that the entire market may be caught off guard. But, it is my contention that cannabis federal legalization will occur on some level this year, 2022.
In Cannabis Clemency Chess, the King just moved.
Biden grants three pardons, 75 commutations for individuals serving for nonviolent drug crimes
— Todd Harrison (@todd_harrison) April 26, 2022
As we can see, there are moves in the right direction with cannabis federal legalization. The House of Representatives has passed a version already of cannabis federal legalization. From here, the Senate is expected to move forward with its own version shortly.
Next? Something will occur shortly for cannabis federal legalization. Banking is a big deal for the Feds. They will want that to occur.
Not a one-way road higher
I am not expecting that when cannabis federal legalization occurs that all cannabis stocks will head higher i a straight line. Instead, after any kind of surge, I am expecting that cannabis stocks will come back down. Then, it is up-listing to Nasdaq that everyone will be awaiting. That is when real money will start to move in. That is when cannabis stocks will see serious support.